Crisis Instruments and Business Dynamics: How Asset Purchases Shape Plant Exits and Entries

70 Pages Posted: 19 Jan 2023

See all articles by Manfred Antoni

Manfred Antoni

Institute for Employment Research (IAB)

Talina Sondershaus

Lund University School of Economics and Management

Abstract

Asset purchase programs (APPs) may allow banks to continue lending to low productive borrowers. We use administrative plant and bank data to test whether APPs changed business dynamics in terms of plant entry and exit. Plants in Germany linked to banks with access to an APP are approximately 20% less likely to exit. In particular, low productive plants linked to weakly capitalized banks are less likely to close, which we interpret as evidence for subdued factor reallocation. Meanwhile, well-capitalized banks enable productive plants to survive longer, and employment increases mildly.

Keywords: Plant exits, extensive margin factor reallocation, asset purchase programs

Suggested Citation

Antoni, Manfred and Sondershaus, Talina, Crisis Instruments and Business Dynamics: How Asset Purchases Shape Plant Exits and Entries. Available at SSRN: https://ssrn.com/abstract=4329841 or http://dx.doi.org/10.2139/ssrn.4329841

Manfred Antoni

Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany

Talina Sondershaus (Contact Author)

Lund University School of Economics and Management ( email )

Lund

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